EIB and EU grant sign €395M loan for renewable energy projects in Bangladesh – EQ
In Short : The European Investment Bank (EIB) and the European Union have signed a €395 million loan agreement to support renewable energy projects in Bangladesh. This funding aims to enhance the country’s energy security, reduce greenhouse gas emissions, and promote sustainable development. The projects financed through this loan will contribute to the expansion of renewable energy sources, such as solar and wind, in Bangladesh, aligning with the nation’s efforts to transition towards a more sustainable and low-carbon energy sector. The partnership between the EIB and the EU demonstrates their commitment to advancing renewable energy initiatives in developing countries, fostering economic growth, and addressing climate change challenges.
In Detail : The €350 million framework loan provides for investments in utility-scale public green energy generation, implemented through various public promoters represented by power generation entities.
At the Global Gateway Forum held today in Brussels, a €350 million loan by the European Investment Bank (EIB) and a €45 million EU investment and technical assistance grant were signed to support climate action investments and develop renewable energy generation projects in Bangladesh. The signing was attended by Teresa Czerwińska, Vice-President of the EIB; Ursula von der Leyen, President of the European Commission; and Sheikh Hasina, Prime Minister of Bangladesh, and coincided with the 50-year anniversary of the EU-Bangladesh partnership.
The €350 million framework loan provides for investments in utility-scale public green energy generation, implemented through various public promoters represented by power generation entities. The €45 million EU blending grant includes €6 million of technical assistance to ensure that all sub-projects comply with international market practices and the EIB’s environmental and social standards, and €39 million of investment grants to bring in concessional lending tools to support these first utility-scale renewable energy projects in Bangladesh.
The project pursues the sustainable green transition of the country’s power sector and its climate mitigation targets. The sub-projects, located throughout Bangladesh to boost energy access and rural development, will mainly consist of utility-scale solar photovoltaic and onshore wind projects, and potentially the associated battery storage systems. The operation is expected to enable installation of around 750 MWp of new renewable energy capacity in Bangladesh.
These investments should also improve power distribution and decentralisation, increasing national (and even regional) connectivity and resilience. These are key objectives of the Global Gateway initiative created to support projects that improve global and regional connectivity in the digital, climate, transport, health, energy and education sectors.
EIB Vice-President Teresa Czerwińska stated, “As the EU Climate Bank, alongside our Global Gateway partners, the EIB is constantly working to increase the impact of its climate lending and to support countries like Bangladesh in transitioning to more sustainable and green energy generation. I’m proud of the first EIB operation for renewable energy projects in Bangladesh that contributes to meeting the country’s ambitious renewable energy target. This operation shows the EIB’s strengthened commitment to Bangladesh’s sustainable development.”
Speaking in Brussels, European Commission President Ursula von der Leyen said, “The European Commission, the EIB and Bangladesh are partnering to foster renewable energy. With €400 million of support, Global Gateway is making a difference for the people of Bangladesh.”
Prime Minister of Bangladesh Sheikh Hasina remarked, “We are confident that this initiative will enable developing countries such as Bangladesh to fight climate change, to address infrastructure gaps, invest in renewable energy, digital innovation, healthcare, education and much more. The Global Gateway is a sign of friendship, of partnership, of trust, of symbiotic interdependence.”
